Rachel Reeves may have to pay £38,000 to tenants after renting out home without licence

Keir Starmer has ruled out an investigation

The chancellor admitted the error in a letter last night (29 October) to Prime Minister Keir Starmer, saying that she did not obtain a "selective" rental licence required to rent out her London home.

She "sincerely" apologised for her "inadvertent error".

In light of the news, the Conservatives have called for an investigation into the chancellor as well as her to be sacked.

However, Starmer has already said there will not be an investigation.

This comes after he said was happy that the "matter can be drawn to a close" after he spoke with independent ethics adviser Sir Laurie Magnus.

The adviser has previously been the downfall of Angela Rayner and Louise Haigh.

Now, the Financial Times has reported that the Chancellor may be forced to pay her tenants £38,400 who were renting the property.

Tenants can apply for a 12-month repayment order if they have rented a property that is not licensed, under rules imposed by Southwark Council.

At £3,200 per month, it means the total amount the Chancellor may have to pay back totals £38,400.

In a letter to the PM, Reeves told Starmer that she was not aware she needed a licence in order to rent out her home in London after she moved to Downing Street last year.

Her letter read: "This was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence.

"I sincerely apologise for this error and I would be happy to answer any questions you may have."

In his response, the prime minister said the public expected "the highest standards" and confirmed he had consulted with Sir Laurie Magnus, the ethics adviser whose findings have previously felled two ministers.

Reeves' family home in London was put up for rent after Labour won the election in July 2024 for £3,200 a month.

It is in an area where Southwark Council requires private landlords to hold a selective licence.

The full letter read: "I wanted to make you aware of a matter which has been brought to my attention regarding my family home which we are letting out to tenants via an external lettings agency.

"The property is situated in Dulwich Wood ward of Southwark Council. There are selective licensing requirements in this ward for renting out a property. Regrettably, we were not aware that a licence was necessary, and so we did not obtain the licence before letting the property out.

"This was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence.

"The property is declared on the Members' Register of Interests in line with requirements. I have today spoken to the Independent Adviser on Ministerial Standards and I have made the Parliamentary Commissioner for Standards aware.

"I sincerely apologise for this error and I would be happy to answer any questions you may have."